15 April 2024
Savannah Resources
Plc
(AIM: SAV, FWB: SAV and SWB:
SAV) ('Savannah', or the
'Company')
Financial Results for the
Year Ended 31 December 2023
Savannah Resources Plc, the
developer of the Barroso Lithium Project (the 'Project') in
Portugal, Europe's largest spodumene lithium deposit, is pleased to
announce its audited financial results for the year ended 31
December 2023.
"The team delivered significant progress during 2023,
achieving several important milestones which are allowing Savannah
to further advance its Barroso Lithium Project in
2024." commented Emanuel Proença, CEO. "The award of a positive
environmental impact decision ('DIA') for the Project demonstrated
Savannah's ability to design a project that satisfies the demanding
environmental and social standards which are rightly required of a
21st Century critical raw material project in the European Union.
The updated Scoping Study then demonstrated the highly competitive
and attractive economics of that DIA-compliant design. On these
foundations we were able to raise funds from new and existing
investors to accelerate work on the Project's Definitive
Feasibility Study ('DFS'), expand our team at all levels, and
continue with our stakeholder engagement programme and
environmental licencing process. We were also able to initiate a
Strategic Partnering Process as we look to leverage the widespread
commercial interest in our Project for its future financing and
development. Much progress has already been made in 2024 and we
expect to continue to make significant advances on all
project-related workstreams during the remainder of the
year.
"I
am now over 6 months into my role leading Savannah and recognise
more and more each day how beneficial our Project can be for the
region we operate in, for Portugal and Europe in supporting our
collective challenge of tackling climate change. I am proud of the
business that Savannah is and am very excited for our
future."
2023 Summary
Corporate
·
Emanuel Proença appointed as Chief Executive
Officer ('CEO') in September.
·
Dale Ferguson resumed his previous role as
Technical Director having served as Interim CEO since July
2022.
·
Bruce Griffin, an experienced mining industry
executive and current Chair of ASX-listed Sheffield Resources,
joined the Board as an Independent Non-Executive
Director.
·
Mohamed Sulaiman, current Head of Strategy at the
Omani conglomerate business, WJ Towell Group and an experience
board director, joined as Non-Executive Director and the Board
representative of Savannah's largest shareholder, Al
Marjan.
·
Savannah recorded a loss from continuing
operations of £3.5m (2022: £2.7m). The Company completed a £6.5m
(gross) fundraise, providing a pro-forma cash balance of £11.4m in
July. With continued investment in its asset base and team in
Portugal during the remainder of the year, Savannah ended 2023 with
an available cash position of £9.0m.
·
Manohar Shenoy, Savannah's much respected
Non-Executive Director who joined the Board in 2016, passed away in
September.
Barroso Lithium Project,
Portugal
Technical
·
After the submission of the Project's revised
Environmental Impact Assessment ('EIA') in March and a second
public consultation period, the Project was awarded a positive DIA
with conditions by the Portuguese Environment Agency in
May.
·
A new Scoping Study was published in June based on
the DIA-compliant Project design. With average production of
191,000t of spodumene concentrate over a 14-year life, the Project
returned a post-tax NPV of US$953m, IRR of 77% and pay-back period
of 1.3 years.
·
Following receipt of the DIA, work was accelerated
on the Project's DFS and initiated on the compliance phase
('RECAPE') of the environmental licencing process.
·
A two-phase, 13,500m/230-hole drilling programme
was initiated in October for DFS and RECAPE related data
collection, including upgrades to the Project's existing JORC 2012
Compliant Resources.
Stakeholder Engagement
·
Savannah hosted or attended a series of local
public meetings throughout the year to provide accurate information
on the revised design of the Project to stakeholders.
·
Following receipt of the DIA and the new CEO's
appointment, the intensity of stakeholder engagement activities in
the local area was further increased through formal and informal
meetings, publications and the local media.
·
Community Insights Group conducted around 400
interviews with local residents to gauge their views on the Project
and feed this data into the ongoing Social Impact Assessment study,
which will be an important component of Savannah's RECAPE
submission.
·
Savannah maintained regular contact with relevant
Portuguese ministries and government agencies and met with several
Portuguese MEPs, representatives of the UK and the US Government
and other embassies in Portugal.
Commercial
·
Following strong commercial interest in the
Project for a number of years, Savannah initiated a Strategic
Partnering Process (the 'Process') in July.
·
Savannah appointed Barclays and Barrenjoey as
joint financial advisers to lead on the next phases of the
Process.
2024 Year to date Summary
Corporate:
·
In response to the Operation Influencer
Investigation, which was made public by the Portuguese Public
Prosecutor in November 2023, Savannah announced the conclusions
from an Independent Review and Legal Opinions it had commissioned.
The Independent Review found no evidence which would give rise to
liability in connection with any irregular financial transactions
by the Company.
·
The Review also found no evidence of improper
offers, improper payments, or other forms of wrongdoing by the
Company regarding the suspicions set out in the Investigation. The
Legal Opinions also confirmed that under no realistic circumstance
would the Project's execution and its expected future cash flows be
at risk from the Investigation's findings.
·
Savannah has appointed experienced professionals
to the roles of Community Relations Manager and Communications
Manager.
·
Savannah hosted an investor event in London,
attended the PDAC mining conference in Toronto, Benchmark Mineral's
Giga Europe conference in Stockholm and Value Investing FM's Grand
Event in Madrid.
·
The Company received the Overseas Direct
Investment Award from the UK-Portugal Business Alliance in
March.
Barroso Lithium Project,
Portugal
Technical
·
Over 5,500m of drilling has been completed to date
in the current programme with other work for the DFS and RECAPE
phase of the environmental licencing process progressing in
parallel.
·
Savannah expects to complete the DFS by the end of
the year which will allow the completion of the RECAPE shortly
afterwards.
Stakeholder engagement:
·
Savannah is maintaining its proactive engagement
with all local stakeholders via meetings, events, publications and
the media as it continues to present the Project and receive
feedback.
·
Savannah has welcomed a number of guests to
Boticas and the Project in the year to date as it steps up
engagement with the Project's wider stakeholder group.
·
Work has continued on the Project's Social Impact
Assessment.
Commercial:
·
The second phase of the Strategic Partnering
Process is underway with a short-list of potential partners
conducting further due diligence on the Project and
Savannah.
·
In parallel with the Process, Savannah continues
to research and analyse sources of public funding which may be
available to the Company as it seeks to progress the
Project.
Electronic Communications and Notice of AGM
Key excerpts of the Company's Annual
Report and Financial Statements to year end 31 December 2023 are
set out below. The full Annual Report and Financial Statements will
be posted to those of our members electing to receive paper format
notifications. The Company is grateful to the remainder of our
shareholders choosing to receive digital notifications as this
helps to reduce the Company's carbon footprint. The report is also
available for download from the Company's website at:
www.savannahresources.com/investors/corporate-documents/
Information regarding the Company's
AGM will be announced in due course.
Regulatory Information
This Announcement contains inside
information for the purposes of the UK version of the market abuse
regulation (EU No. 596/2014) as it forms part of United Kingdom
domestic law by virtue of the European Union (Withdrawal) Act 2018
("UK MAR").
Savannah - Enabling Europe's energy
transition.
Follow @SavannahRes on X
Follow
Savannah Resources on LinkedIn
For further information please
visit www.savannahresources.com
or contact:
Savannah Resources PLC
Emanuel Proença, CEO
|
Tel: +44 20 7117 2489
|
SP
Angel Corporate Finance LLP (Nominated Advisor & Joint
Broker)
David Hignell/ Charlie Bouverat
(Corporate Finance)
Grant Barker/Abigail Wayne (Sales
& Broking)
|
Tel: +44 20 3470 0470
|
SCP
Resource Finance (Joint Broker)
Filipe Martins/Chris
Tonkin
|
Tel: +44 204 548 1765
|
Camarco (Financial PR)
Gordon Poole/ Emily Hall / Nuthara
Bandara
|
Tel: +44 20 3757 4980
|
LPM
(Portugal Media Relations)
Herminio Santos/ Jorge
Coelho/Margarida Pinheiro
|
Tel: +351 218 508 110
|
CHAIRMAN'S STATEMENT
Keeping the big picture in sight
After a challenging end to 2023 for
the Company, which came on top of a challenging year for the whole
lithium sector, I am very pleased to have this opportunity to
reiterate to shareholders the significant progress that the Company
made in the period, and to outline the Company's ambition for 2024
and beyond.
The market backdrop for our business
remains very positive. The energy transition is taking place at a
rapid pace and we are now in a period of intense political and
commercial competition as countries and companies look to secure
market share within this new industrial sector.
For example, the International
Energy Agency reports that in 2023, global renewable energy
capacity increased by nearly 50% to 510GW, of which
approximately 75% was
solar PV. This was the 22nd consecutive year of growth
and the fastest growth rate in the past two decades. The statistics
for sales of electric vehicles (EVs) also remain robust.
EV-volumes.com report 14.2m plug-in vehicles were sold globally
last year, representing approximately 16% all new vehicles
sold. This included just over 3m in Europe, where the EV market
share of new sales is over 20%. Global sales of that quantum
represent a 33% increase over 2022. Though year-on-year sales
growth has slowed (+55% during 2022) I don't believe 2023's growth
rate could ever be regarded as representing a market in difficulty.
Indeed, it appears that the EV market has remained remarkably
buoyant given the macroeconomic and political stresses that have
been placed on the global economy during the year by rising
interest rates, the ongoing war in Ukraine and, more recently, the
conflict in Gaza and the resulting instability in the Middle
East.
Furthermore, we should not forget
the highly supportive policies and associated financial packages
put in place by many major governments to execute the transition,
address the worst impacts of climate change, and to prepare their
economies for a carbon-neutral future. For example, the United
States' 2022 Inflation Reduction Act includes nearly USD400bn in
federal funding for clean energy with the goal of substantially
lowering the nation's carbon emissions by 2030. The European
Commission's 2023 Green Deal Industrial Plan, designed to enhance
the competitiveness of Europe's net-zero industry and accelerate
the transition to climate neutrality, could offer over EUR600bn in
investment over a range of funding packages. Japan's green
transformation plans aim to raise up to JPY 20 trillion
(approximately EUR140 billion) through "green transition" bonds and
China's announced investment in clean technologies exceeds
USD280bn.
Overall, I think these statistics
leave little room but to conclude that the energy transition is
very much alive.
The economic and geopolitical
turmoil of 2023 is not the only factor which caused the falls in
the price of lithium during the year. Another factor, which has
become apparent only with hindsight, is the nature of the buying
out of China which took place during 2021 and 2022. While this
helped fulfil demand and lifted the spodumene price by
approximately 2,000% in
tight market conditions, it was also being partially used to create
an inventory of products right along the battery value chain.
During 2023, this inventory of products was worked down meaning
demand for lithium raw materials was reduced, just at a time when a
number of lithium mining projects increased production or came
online for the first time. The result was excess raw material in
the market and an 80%+ fall in lithium prices during the year. This
downward trend continued into 2024, eventually triggering a supply
side response with several operations, including the world's
biggest spodumene mine, Greenbushes in Australia, reducing
production. Fortunately, the downward price trend appears to have
abated with a modest improvement in prices seen since late February
2024 as inventory levels along the battery value chain run low and
China becomes active again after its New Year holiday.
An 80% fall in prices is clearly
material but it is still worth remembering that the USD1150/t price
for spodumene we have today is more than three times those seen in
late 2020 and nearly 68% higher than the average price used in our
2018 Scoping Study.
As one would expect, market analysts
have lowered their short to medium price forecast for lithium
products following this correction. However, what is important to
note for Savannah given our proposed commissioning target in 2026,
is that long term pricing and the expectation of a shortfall in
supply against ongoing demand growth remains in place. While our
Project remains economically viable at price levels much below
those seen currently, the long-term lithium market dynamics remain
very supportive for Savannah, with long-term price expectations
well above today's level. Furthermore, this comes on top of the
strategic target Europe has set itself of meeting at least 10% of
domestic demand from local supply by 2030 as outlined in last
year's Critical Raw Material Act. This further supports our
Project's development. The real challenge, as has always been the
case, is not the lithium market dynamic but to secure all the
building blocks - finance, partners, licences, etc. that we need to
get to production.
Unfortunately, for lithium sector
investors the unpredictability and volatility in this small volume
commodity market (lithium global demand was approximately 900kt LCE in 2023 vs.
Iron ore at 2.2Bt+ pa) will be with us going forward. Nonetheless,
the fundamentals are supportive and I am confident we remain on a
path towards substantial value creation.
Savannah's key successes in 2023
Turning to Savannah specifically,
the Company made great progress during 2023, the very significant
value of which, I believe will be fully appreciated again in a more
upbeat lithium market than we have today. Our key achievements
during the year are summarised below.
The DIA underpins everything
The re-submission of the Project's
Environmental Impact Assessment ('EIA') and subsequent positive
decision ('DIA') by the Portuguese Environment Agency ('APA') as
the culmination of the 'Article 16' process we had entered in July
2022, was the dominant theme for the first five months of the year.
My thanks again go to our technical team, led by Dale Ferguson, and
all our expert consultants who worked so hard to produce such an
innovative design and operating plan for the Project which was able
to satisfy the very exacting demands of APA, members of its
evaluation committee and other stakeholders. To be the first
lithium project in Portugal to receive a positive DIA decision from
the regulator was a great achievement for Savannah, and provided
the foundation and impetus which allowed us to move forward with
many other key aspects of the Project since last Spring.
The Scoping Study proved the new business
case
With the DIA in hand, last June and
July were an extremely busy and productive period for the Company.
June's Scoping Study, the first economic study on the Project in
five years, included all the elements of the DIA compliant design
and demonstrated that the new Project can have very attractive
economics (Post-tax NPV USD953m or 41p/share) even with
approximately USD150m of
combined capex and opex dedicated to further reducing the
environmental and social impact of the Project.
Additional capital allowed us to advance with
confidence
Buoyed by the DIA and the new
Scoping Study, Savannah was then keen to accelerate the Definitive
Feasibility Study and the compliance phase ('RECAPE') of the
environmental licencing process. To do this additional finance was
required, and a successful GBP6.5m (gross) fundraise was completed
in challenging market conditions in early July at 4.67p/share, par
with the market price. As part of the fundraise we were pleased to
receive the support of a number of existing shareholders, including
our two largest, Al Marjan and Slipstream Resources, and members of
the Board and Management. We also welcomed new sector specialist
institutional investors and new private shareholders as we built a
treasury of over GBP11m. This allowed us to undertake work on the
DFS and the RECAPE, with confidence and to take on new members of
staff in key positions as we build towards production.
Appointment of new Chief Executive Officer
('CEO')
In September, we were delighted to
welcome Emanuel Proença as our new CEO, with Dale Ferguson resuming
his previous role as Technical Director. Emanuel joins Savannah
from Prio Group, which is the largest producer and supplier of
biofuels in Portugal and where, as CEO of 'Prio Supply', he grew
EBITDA by 20 times in 6 years. Hence, he has developed skills in
managing a rapidly growing business, which are highly transferable
to Savannah, as are his existing relations with industry
regulators, commercial partners in the energy sector, and service
providers as well as his knowledge of Portuguese Government
processes. He also has a strong record of maintaining a
constructive rapport with local communities and other stakeholders.
Equally important, as Savannah's first Portuguese CEO, Emanuel's
appointment underlines Savannah's commitment to Portugal and the
Project, and brings a fresh focus and immediacy to our efforts as
we look to develop Savannah's brand as an important, responsible
and successful business in Portugal. Emanuel will be appointed to
the Board in April 2024.
Partnerships can make us stronger
Shareholders will be aware that
commercial interest in the Project and its spodumene lithium
offtake has been strong for a number of years and increased
significantly following the DIA approval and publication of a new
Scoping Study in 2023. To quantify the commercial interest
received, the Company initiated an orderly Strategic Partnering
Process ('SPP' or the 'Process') in July, in which interested
parties were invited to submit proposals outlining how they could
assist Savannah with financing the Project's development as part of
a long-term commercial relationship with the Company. Due to the
high number of positive responses received from a wide range of
groups, in November we appointed Barclays Bank Plc and Barrenjoey
Advisory Pty Limited ('Barclays and Barrenjoey') as joint financial
advisers to lead on the Process. Following completion of the first
phase of the exercise, the Process is now focused on engaging with
a shortlist of potential partners both willing and able to assist
with the Project's future development and financing, and which also
bring complementary skills or additional opportunities to
Savannah.
Savannah's key challenges during the year
Despite the many achievements listed
above, we have had to contend with persistent negative media
coverage of the Project, principally instigated by a small group of
individuals from the local area. This was compounded by the
announcement of the so-called 'Operation Influencer' investigation
by the Portuguese Public Prosecutor in November 2023.
Stakeholder engagement
With the DIA received and the
appointment of our new Portuguese CEO, we have further increased
the intensity of our stakeholder engagement activities. The EIA
captured the significant changes being proposed to the Project and
additional explanation has been provided to local stakeholders at
all levels via formal and informal meetings. We are dedicated to
being 'present' locally, explaining the Project to people, hearing
their views and building relationships. Pleasingly this does seem
to be starting to have a positive impact. This can be demonstrated
by the increasingly strong relationships we have with some local
people and businesses, our increasing number of local employees,
the regular inquiries we receive at our Information Centre in
Boticas about work opportunities and services that Savannah might
need. We also have some local people who are willing to speak to
the media about the merits of the Project. Our consultants,
Community Insights Group ('CIG'), have also conducted around 400
interviews with local residents to gauge their views on the Project
and feed this data into the ongoing Social Impact Assessment
study.
Regrettably, it is difficult for
shareholders monitoring the Project through the media to appreciate
this. We have always recognised that not everyone views the
development of the Barroso Lithium Project positively. With the
award of the DIA significantly increasing the likelihood of the
Project's future development, it was always to be expected that
those against the development would increase and intensify their
opposition. They appreciate the significant advancement which the
positive decision by the country's regulator represents for the
Project. The additional legal cases that have been brought in
relation to the Project, which Savannah believes are without
foundation, coupled with the increased stream of negative media
coverage in the second half of the year are a cause for ongoing
frustration. However, we will continue to communicate the positive
benefits of our project for the local community, Portugal and
indeed Europe as a whole, and our efforts to minimise any and all
negative impacts it may have. Our project can represent the
foundation of a new industry for Portugal, and provide a new,
long-term economic anchor for the Boticas municipality via millions
of euros in taxes and royalties (thereby providing sustained
financial support for community-led initiatives), whilst also
creating hundreds of direct and indirect jobs.
Operation Influencer
The initiation of Operation
Influencer by the Portuguese Public Prosecutor in November has had
a significant impact on the Company's brand but it has not stopped
us working for a minute. However, we took proactive steps,
announced in January 2024 and reiterated below, to clarify the
Company's position and re-establish confidence.
On 7 November 2023 the Portuguese
Public Prosecutor's Office announced publicly the existence of
'Operation Influencer' (the 'Investigation'), an inquiry into
possible corruption, undue influence, malfeasance and other
wrongdoings in relation to the Sines 4.0 data centre project and
H2Sines hydrogen project, both in the southern port city of Sines,
the Romano lithium mine in Montalegre, and the Barroso mine (the
Barroso Lithium Project) in Boticas. Savannah cooperated fully with
the authorities on that day when some of our premises were visited,
but none of our staff were arrested (5 arrests were made in total)
or named as 'arguido' under formal investigation. Since then, the
Company has been free to continue with all its business activities
unencumbered. On 21 December 2023, the PPO
announced that the Investigation was being split into three
separate investigations (by industry), with one now covering the
two lithium projects. Savannah can confirm that it has no
relationship with the other lithium project involved.
On 30 January 2024, Savannah
announced the conclusions from an independent legal review (the
'Independent Review') and legal opinions (the 'Legal Opinions')
which it commissioned following the announcement of the Operation
Influencer investigation. In summary, the Independent Review found
no evidence which would give rise to liability of the Company in
connection with any irregular financial transactions by the
Company. It also found no evidence of improper offers, improper
payments, or other forms of wrongdoing by the Company regarding the
suspicions set out in the Investigation associated with: past
relations with a potential partner, discussions on the by-pass
road, royalties, or in relation to interactions with national
entities in the EIA process under Article 16. No material legal
risk was identified related to the alleged facts and circumstances
outlined in the Investigation.
Separate Legal Opinions also
confirmed that, based on the findings of the Independent Review,
but also on the functioning of the Portuguese permitting process,
past legal experience, and constitutional protections, under no
realistic circumstance would the Project's execution and its
expected future cash flows be at risk from
the Investigation's findings.
Hence, the conclusions of the
Independent Review and the Legal Opinions demonstrated Savannah's
solid legal position in relation to the alleged facts and
circumstances contained in Operation Influencer.
Based on past similar cases, the
timeline for next steps is uncertain and likely to be long, and a
formal clearing or accusation is not expected in the near
term.
Building a team for the future
In addition to the appointment of
Emanuel Proença as CEO, the Company also welcomed two new
Non-Executive Directors. Bruce Griffin joined as an Independent
Non-Executive Director, while Mohamed Sulaiman joined as
Non-Executive Director, replacing the retiring Imad Sultan
(Non-Executive Director since July 2016) as the Board
representative of Savannah's largest shareholder, Al
Marjan.
Bruce Griffin brings over 20 years
of mining sector experience to Savannah's Board and is currently
Executive Chair of ASX-listed Sheffield Resources, which has
recently built and commissioned its 10Mtpa Thunderbird minerals
sands project in Australia. Mohamed Sulaiman is Head of Strategy at
the Omani conglomerate business, WJ Towell Group, and previously
led Strategy and Performance at OQ, the Omani energy company. He
has significant experience on the boards of both public and private
companies, and in the energy sector. The pair have been a great
addition to our board and I look forward to their continuing
contribution.
Very sadly, just a few days after
these new appointments, we were sorry to learn of the passing of
our friend and much-respected Non-Executive Director, Manohar
Shenoy. Manohar, who was Chairman of the Board's Audit and Risk
Committee first joined Savannah's Board in 2016 as an alternate
Director for one of the nominees of Al Marjan and became a
Non-Executive Director in his own right in April 2022. During his
lengthy time with Savannah, Manohar made many valuable
contributions and his insightful input and friendly demeanour is
greatly missed.
Finally, and on a happier note, we
have also been pleased to add to our technical, communication and
community liaison teams over recent months. It has been
particularly pleasing for me that a number of these recruits have
come from the local area.
Financial Overview
With the receipt of the positive DIA
decision and the publication of the Scoping Study, in order to
confidently progress the DFS the Company completed a GBP6.5m gross
fundraise providing a pro-forma cash balance of GBP11.4m in July.
With continued investment in its asset base in Portugal during the
remainder of the year (GBP2.3m in total; 2022: GBP2.6m), combined
with the expansion of its team and the launch of its Strategic
Partnering Process to evaluate the options for the financing of the
Project's development, the Group ended the year with an available
cash position of GBP9.0m. Hence, our opening cash position for 2024
allows us to progress the DFS and RECAPE.
In terms of the broader financial
performance, Savannah recorded a loss from continuing operations of
GBP3.5m (2022: GBP2.7m). Administration fees for 2023 amounting to
GBP3.5m were in line with 2022 cost of GBP3.5m. However, H2 2023
Administration fees were GBP0.7m (50%) higher than the cost in H1
2023. This resulted from the increase in activities after the
receipt of the positive DIA decision, and from investments in both
the appointment of a CEO and clarifying the Company's position and
re-establishing confidence by demonstrating a solid legal position
in relation to the alleged facts and circumstances contained in
Operation Influencer.
Outlook
The many strands of this important
project are beginning to come together. As we stand today, the
completion of the DFS and the environmental licencing processes are
in sight, and we already have the Mining Lease we need. Strategic
partnerships and associated financings are also achievable in the
near-term and we have options available to us to secure the land we
need to develop the Project. There are many individual Portuguese
who would like to participate in the lithium battery value chain
which is developing in their country, including our Project. This
has allowed us to grow our team with highly skilled individuals and
build relationships with many other businesses, trade bodies and
potential investors. Furthermore, all this is now being done
against a supportive European political backdrop, which is calling
for meaningful domestic production of critical raw materials by
2030. Hence, I believe we can move forward with confidence
acknowledging that, while the lithium market will remain volatile
and that many challenges lie ahead, the long-term situation will be
in our favour.
By achieving our goals, the Barroso
Lithium Project can generate a significant amount of financial and
social benefit for all its stakeholders, including our
shareholders, and provide society with one of the critical raw
materials it needs to combat climate change and develop a net-zero
carbon economy suitable for the future.
To make this happen much more work
is required from our team and all our service providers and I thank
them for their significant efforts made to date and their efforts
yet to come. Our success also relies on the continued support of
our shareholders whom I also thank for their commitment to sharing
Savannah's goal of becoming a major player in Europe's new lithium
battery chain.
Matthew King
Chairman
Date: 12 April 2024
CHIEF EXECUTIVE'S REPORT
I was delighted to join the Savannah
team in September to play my part in the development of the Barroso
Lithium Project. I see the Project as a unique opportunity for
Portugal to become a very significant player in a new, future
facing, industry.
As key decision makers in Portugal
have often pointed out, the country must not hesitate to take
advantage of the unique opportunity presented by its hardrock
reserves of lithium, which are the largest in Europe. These
reserves grant Portugal the chance to take a leading role in the
region's energy transition. I firmly believe that by responsibly
developing this new industry, including the lithium resources at
the Barroso Lithium Project, we can bring meaningful benefits to
the Portuguese national economy, its local economies and to
individual stakeholders in projects, such as local people and
company shareholders, such as Savannah's.
The success or failure of our
society to deliver the energy transition and a net-zero global
economy will have a direct impact on all our lives in the coming
decades. Hence, I'm very keen to do what I can to combat the
worsening effects of climate change and I am humbled by the
opportunity to do it through a project of unmatched size and
opportunity, alongside a great team of professionals.
As this is the first of what I hope
will be many CEO reports I will write for Savannah, I thought I
would take this opportunity to layout my observations since joining
the Company seven months ago, and highlight the areas that I will
be focusing on to take our Project forward.
Observations:
1.
The quality of our project gives
us an excellent opportunity: The natural parameters of the
Project including its scale, location, and conventional spodumene
lithium mineralisation, make it a very significant lithium asset.
These parameters also make it an ideal development project for a
company like Savannah. It has also shown its economic robustness by
being able to bear the additional costs associated with the very
comprehensive design elements required to minimise its
environmental and social impact, and gain the final approval from
the regulator - making this a project that responds to the most
stringent European standards. Furthermore, as we have shown
throughout our time working on the Project, there is huge mineral
potential on the Mining Lease beyond the current limits of the
orebodies defined to date.
2.
We have a great team:
Savannah is fortunate to have highly capable and very dedicated
staff, who work together extremely well, often under testing
circumstances. As my appointment and the other appointments we have
made recently show, there is a commitment to not only grow the team
but to take on and empower Portuguese nationals, reflecting the
importance of the Portuguese project to the Company. Equally, we
understand that to achieve all our goals, including best practice
at the Project, we must utilise skills and knowledge which we can't
find in Portugal today, and our staff demographics will always
reflect that.
3.
The Project is
'achievable': Given the highly strategic nature of the
asset, people are often surprised that the capex, including nearly
20% contingency is only approximately USD280m. In reality, a
project processing 1.5Mtpa is not large by industry standards.
While that is still a significant sum, it is very modest when
compared to the capital expenditure required to build lithium
chemical plants (refineries) or integrated projects which feature
both a mine and a chemical plant, or even alternative mining
projects in lithium or other commodities. Furthermore, it should be
a sum which Savannah can secure. Despite the significant fall in
the lithium price during 2023, this sector still has strong
potential for corporate transactions and sustained interest from
investors. Industry participants understand the value of future,
long term, supply from low-risk projects in stable jurisdictions.
The Barroso Lithium Project offers these features, and Savannah
should feel confident that financing solutions will be found and
that more of the Project's value will be recognised in our share
price in the future.
Through our Strategic Partnership
Process we expect to generate value for our shareholders by
identifying industry groups which appreciate the strategic
advantages of assisting Savannah with the Project's financing. We
are also investigating the latest opportunities for public funding
which may be available following the additional focus placed on the
domestic production of 'Critical' and 'Strategic' raw materials by
the recent approval of the new Critical Raw Materials Act by the
European Parliament.
4.
We have a strong mandate for
development: The award of the DIA by the environmental
regulator was a huge step forward for the Project. While there is
much work still ahead in the remainder of the year to complete the
current RECAPE, or compliance, phase of the environmental licencing
process, the DIA's positive impact on the probability of the
Project's development should not be underestimated. In combination
with the existing 30-year Mining Lease, as well as the positive
stance of the major political parties in Portugal towards
development of a domestic lithium industry, we have a good
foundation from which to move forward with confidence.
5.
Misunderstandings
regarding the Company's brand: The
combination of the Project's extended development timeline,
confusion over the licencing process in Portugal, spurious legal
actions brought in relation to the Project, persistent negative
press coverage often instigated by anti-mine campaigners, and the
Operation Influencer investigation, have all contributed to
severely impact Savannah's brand. This has created challenges in
many aspects of our business which in turn slow our rate of
progress and undermines the real value of our asset.
This perception doesn't match the reality of a
project that is in so many aspects good for everyone. I am, as is
everyone in the team, proud to support and defend the merits of
Savannah's project. Transmitting that pride to the public will
certainly help turn the tide.
Drilling during the first phase of the 2023/24
programme:
Source: Company
My
current focus and future actions
1.
On project development: I
agree with the clear message I have received from shareholders and
advisers that 'delivery' of the Project and all the various
milestones along the way is our best opportunity to distil greater
value in our share price. I trust shareholders will appreciate from
our announcements over the last few months, we are progressing the
Project as quickly as we can to a Final Investment Decision. I am
working closely with our technical team, under the leadership of
Dale Ferguson, to ensure they have all they need to maintain
progress. If we can remain on track with our activity and funding
plans we should complete the Definitive Feasibility Study by the
end of the year and the RECAPE phase of the environmental licencing
process shortly afterwards. While the technical team goes about its
work, I and others in the team are focusing on securing the
external inputs we need to complete the DFS and secure the
environmental licence. This includes regular liaison with
government departments and agencies, reviewing our financing
options, and securing the land access required.
On land access, I support a
strategy, defended many times by Savannah in the past, focused on
prioritizing the purchase of land, or the striking of access
agreements on the land we need for the Project with the relevant
private landowners or Baldios groups which manage the land on
behalf of the community. Generous offers have been made, and
agreements have now been reached for 100 parcels of land. We will
continue to pursue this strategy when possible, but at the same
time start to use the rights granted under the Portuguese legal
system to secure the land we need in a timely manner when amicable
agreements are not possible or are taking too long.
2. On team building:
While I identified above that Savannah had an
excellent team, it is also a relatively small team and as we move
forward and grow, we must take on more staff and add key skills to
the group. You will have read in the Chairman's report about the
additional Non-Executive Directors who joined at the same time, but
since summer 2023 we have doubled Savannah's operational team in
Portugal. The majority of new staff have joined the technical team
to assist with the drilling programme and field work we started in
October to provide important data for the DFS and RECAPE.
Pleasingly, ten members of staff are inhabitants of the local area.
In addition, as the Chairman highlighted, we have also recruited
high quality individuals to take up roles including Community
Relations Manager, Communications Manager, and Communications
Assistant. Our 'owner's team' has also expanded with more
consultants engaged in relation to the DFS and RECAPE. I believe
our recent recruitment activities tells shareholders much about the
areas I believe we need to focus on to ensure the Project moves
forward efficiently.
Looking ahead, we will continue to
add to the team as appropriate and always while being mindful of
our cash resources. Furthermore, I have been delighted by the
steady flow of inquiries we have had at our information centre and
through the website regarding future employment. There really is
growing interest in working for Savannah.
3. On achieving the achievable
project: To make this project a
reality we must take it to a point where we can raise the capital
required to build it. To get there, we must first complete the
licencing process, confirm definitively the economic case for the
Project, secure the land we need, build our own team and a suite of
capable service providers, and identify partners and/or customers
who share our vision and see the strategic value in this asset and
its products. Pleasingly, all these workstreams are in hand
including the Strategic Partnering Process, and I will work to
ensure they are all completed. As we reported recently, our
Strategic Partnering Process has now reached the second stage and
we are engaging with a shortlist of counterparties. The team and I
will continue to engage with these groups, and with the assistance
of our advisers, hope to be able to structure a transaction which
underpins the Project's development. At the same time, we will
continue to assess various sources of public funding which are
potentially available to the Project, to make sure Savannah has
multiple financing options available to it.
4.
On using our mandate for
development: I think the Barroso Lithium Project represents
an extremely valuable and important opportunity for Portugal.
Furthermore, we have been given formal approval for the Project
through a lengthy and comprehensive licencing process which
featured two extended periods of public consultation in 2021 and
2023, which we welcomed. Encouragingly, there are many, including
the new government and the other major political parties,
academics, industrialists, and members of the public, who agree
with me and want to see the Project responsibly developed and
operated to establish Portugal in the lithium battery value chain.
Building on the approval we have been given, we want to garner more
of this type of external support to give us a more secure platform
on which to push forward with development. Efforts on this front
are already underway, but looking ahead we will be reaching out to
a wider circle of politicians, including at the European
Commission, networking into related industries and academia through
shared contacts and events, and presenting Savannah to Portuguese
investors where we believe significant latent interest in our
Company exists. Wherever good support is found, we will be actively
encouraging those parties to speak freely about the benefits they
see in our Project.
5. Changing the perception of Savannah and
the Project: For me, this is the
biggest challenge that we face. Looking from the outside, as I did
myself a few short months ago, it is easy to believe that the whole
of the local community, indeed most of Portugal, appears to be
against the development of this Project, others like it, and new
infrastructure in general. I now know from experience, that this is
not the real situation. Furthermore, it is hard to understand why
this would be case, on the basis of facts, given how much good can
be delivered by this project in terms of job creation, value to the
region, opportunity for the country and contribution to the
environmental needs of Europe and the rest of the world. However,
today it appears that perceptions are almost as important as facts,
and that instigating fear is easier for some than providing facts,
as Savannah chooses to do.
Savannah's CEO, Emanuel Proença and Technical
Director, Dale Ferguson receiving the Overseas Direct Investment
Award from HM Ambassador, Lisa Bandari at the UK-Portugal Business
Alliance Awards ceremony, March
2024:
Source: Company
We completely understand those with
genuine concerns about the Project's impact on the local
environment and local communities, and we want to spend time
engaging with them. I have already begun to do this and have spoken
with many individuals and groups in my short time at Savannah.
Encouragingly, I am finding by listening to these people's concerns
and then explaining the accurate facts of the Project - how it will
be developed, the scale of its various parts and the true size of
the land area which will be impacted (and rehabilitated), the steps
we are taking to minimise noise, dust, transport, the jobs it can
create, etc, and reminding them that they live in an area which has
numerous active quarries already, that they become more accepting
of the concept. I, and all the Savannah team, are committed to this
incremental process of winning hearts and minds through open
dialogue. But this is just one front on which we must win the
perception battle.
The active campaign to stop the
development of this Project has been building for a number of
years, led by a small group of very committed individuals. They are
thorough and efficient in their use of the media, social media, and
the legal system to execute their campaign. We believe
misinformation and emotional arguments abound. Few questions are
ever raised by journalists about their underlying motives, or their
alternative solutions to delivering the energy transition we all
need, and the industrial development which must support it, to
tackle climate change. No doubt they are as much affected by this
problem as the rest of us.
As a listed company, with a strong
governance code, Savannah must follow protocols and has not had the
resources to effectively and persistently tackle this campaign.
Quite rightly, in the past two years efforts were more focused on
the creation of a project which satisfies the appointed government
agency and its associated parties, which accurately consider the
environmental and social impact of a project against the
socio-economic benefits it can bring to the country as a whole.
However, now we have created a project which meets the Portuguese
Government's rigorous requirements, and are subsequently
legitimately progressing the Project, the team and I will be
focusing on getting Savannah's side of the story prioritised in the
mainstream media. It is our intention to have much greater control
of the narrative which surrounds our Project. As part of this we
will target the accurate reporting of relevant facts and, where
appropriate, take firm action against those spreading
misinformation and making unsubstantiated claims against
us.
To sum up, we have some very clear
next steps: complete the DFS and the environmental licencing
process; identify our strategic partners; secure finance; leverage
the mandate we have been given to consolidate our position; gain
greater acceptance among local stakeholders; and rebuild our brand
in Portugal and internationally. It's a lot of work, but it can be
achieved and I'm eager to tackle the challenge. My appreciation
goes to our shareholders and stakeholders for their ongoing
support, I look forward to meeting many more of you in the months
ahead. And my thanks to the Savannah team for welcoming me onboard
and responding to the challenge so determinedly.
Emanuel Proença
Chief Executive Officer
Date: 12 April 2024
The Financial Statements below
should be read in conjunction with the Notes contained within the
full Annual Report which is available online at the Company's
website at: https://www.savannahresources.com/investors/corporate-documents/
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR
ENDED 31 DECEMBER 2023
|
|
|
2023
£
|
|
2022
£
|
|
|
|
|
|
|
CONTINUING OPERATIONS
|
|
|
|
|
|
Revenue
|
|
|
-
|
|
-
|
Other Income
|
|
|
-
|
|
-
|
Administrative Expenses
|
|
|
(3,477,405)
|
|
(3,531,894)
|
Foreign Exchange
(Loss)/Gain
|
|
|
(81,116)
|
|
814,468
|
OPERATING LOSS
|
|
|
(3,558,521)
|
|
(2,717,426)
|
Finance Income
|
|
|
108,286
|
|
34,695
|
Finance Costs
|
|
|
(555)
|
|
(265)
|
|
|
|
|
|
|
LOSS FROM CONTINUING OPERATIONS BEFORE TAX
|
|
|
(3,450,790)
|
|
(2,682,996)
|
Tax expense
|
|
|
-
|
|
-
|
LOSS FROM CONTINUING OPERATIONS AFTER TAX
|
|
|
(3,450,790)
|
|
(2,682,996)
|
GAIN/(LOSS) ON DISCONTINUED OPERATIONS NET OF
TAX
|
|
|
(167,304)
|
|
(176,396)
|
LOSS AFTER TAX ATTRIBUTABLE
TO
EQUITY OWNERS OF THE PARENT
|
|
|
(3,618,094)
|
|
(2,859,392)
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
Items that will not be reclassified to profit or
loss:
|
|
|
|
|
|
Net change in Fair Value Through
Other Comprehensive Income of Equity Investments
|
|
|
(5,289)
|
|
(19,598)
|
|
|
|
|
|
|
Items that will or may be reclassified to profit or
loss:
|
|
|
|
|
|
Exchange (Losses)/Gains arising on
translation of foreign operations
|
|
|
(237,364)
|
|
665,656
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME FOR THE YEAR
|
|
|
(242,653)
|
|
646,058
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
|
|
|
|
|
|
ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT
|
|
|
(3,860,747)
|
|
(2,213,334)
|
|
|
|
|
|
|
Loss per share attributable to equity owners of the parent
expressed in pence per share:
|
|
|
|
|
|
Basic and diluted
|
|
|
|
|
|
From Operations
|
|
|
(0.20)
|
|
(0.17)
|
From Continued Operations
|
|
|
(0.20)
|
|
(0.16)
|
From Discontinued
Operations
|
|
|
(0.00)
|
|
(0.01)
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2023
|
|
|
2023
£
|
|
2022
£
|
ASSETS
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
|
|
Intangible Assets
|
|
|
18,391,089
|
|
16,459,599
|
Right-of-Use Assets
|
|
|
56,378
|
|
17,627
|
Property, Plant and
Equipment
|
|
|
1,660,135
|
|
1,583,944
|
Other Receivables
|
|
|
432,003
|
|
454,651
|
Other Non-Current Assets
|
|
|
92,869
|
|
77,667
|
|
|
|
|
|
|
TOTAL NON-CURRENT ASSETS
|
|
|
20,632,474
|
|
18,593,488
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
Equity instruments at
FVTOCI
|
|
|
6,688
|
|
11,977
|
Trade and Other
Receivables
|
|
|
426,065
|
|
560,060
|
Other Current Assets
|
|
|
166
|
|
1,036
|
Cash and Cash Equivalents
|
|
|
9,721,281
|
|
7,202,334
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS
|
|
|
10,154,200
|
|
7,775,407
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
30,786,674
|
|
26,368,895
|
|
|
|
|
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Share Capital
|
|
|
18,281,499
|
|
16,889,598
|
Share Premium
|
|
|
46,598,337
|
|
41,693,178
|
Shares to be Issued
|
|
|
43,423
|
|
-
|
Merger Reserve
|
|
|
6,683,000
|
|
6,683,000
|
Foreign Currency Reserve
|
|
|
389,566
|
|
626,930
|
Share Based Payment
Reserve
|
|
|
600,709
|
|
403,749
|
FVTOCI Reserve
|
|
|
(46,324)
|
|
(41,035)
|
Retained Earnings
|
|
|
(44,606,003)
|
|
(40,999,879)
|
|
|
|
|
|
|
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE PARENT
|
|
|
27,944,207
|
|
25,255,541
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
|
|
Lease Liabilities
|
|
|
39,033
|
|
12,263
|
|
|
|
|
|
|
TOTAL NON-CURRENT LIABILITIES
|
|
|
39,033
|
|
12,263
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
Lease Liabilities
|
|
|
17,345
|
|
5,364
|
Trade and Other Payables
|
|
|
1,993,060
|
|
1,085,778
|
Other Current Liabilities
|
|
|
-
|
|
9,949
|
Tax Provisions
|
|
|
793,028
|
|
-
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
|
|
2,803,433
|
|
1,101,091
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
2,842,466
|
|
1,113,354
|
|
|
|
|
|
|
TOTAL EQUITY AND LIABILITIES
|
|
|
30,786,673
|
|
26,368,895
|
The Financial Statements were
approved and authorised for issue by the Board of Directors on 12
April 2024 and were signed on its behalf by:
Matthew King
Chairman
Company number: 07307107
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2023
|
|
|
2023
£
|
|
2022
£
|
ASSETS
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
|
|
Investments in
Subsidiaries
|
|
|
333,740
|
|
333,740
|
Other Receivables
|
|
|
34,451,813
|
|
31,877,211
|
Other Non-Current Assets
|
|
|
-
|
|
6,776
|
|
|
|
|
|
|
TOTAL NON-CURRENT ASSETS
|
|
|
34,785,553
|
|
32,217,727
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
Equity instruments at
FVTOCI
|
|
|
6,688
|
|
11,977
|
Trade and Other
Receivables
|
|
|
146,252
|
|
238,189
|
Cash and Cash Equivalents
|
|
|
8,226,519
|
|
6,241,356
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS
|
|
|
8,379,459
|
|
6,491,522
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
43,165,012
|
|
38,709,249
|
|
|
|
|
|
|
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Share Capital
|
|
|
18,281,499
|
|
16,889,598
|
Share Premium
|
|
|
46,598,337
|
|
41,693,178
|
Shares to be Issued
|
|
|
43,423
|
|
-
|
Merger Reserve
|
|
|
6,683,000
|
|
6,683,000
|
Share Based Payment
Reserve
|
|
|
600,709
|
|
403,749
|
FVTOCI Reserve
|
|
|
(46,324)
|
|
(41,035)
|
Retained Earnings
|
|
|
(29,540,322)
|
|
(27,442,644)
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
|
42,620,322
|
|
38,185,846
|
|
|
|
|
|
|
LIABILITIES
CURRENT LIABILITIES
|
|
|
|
|
|
Trade and Other Payables
|
|
|
544,690
|
|
523,403
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
544,690
|
|
523,403
|
|
|
|
|
|
|
TOTAL EQUITY AND LIABILITIES
|
|
|
43,165,012
|
|
38,709,249
|
|
|
|
|
|
|
The Company Loss for the financial
year was GBP2,109,648 (2022: Profit GBP1,120,818).
The Financial Statements were
approved and authorised for issue by the Board of Directors on 12
April 2024 and were signed on its behalf by:
Matthew King
Chairman
Company number: 07307107
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
31 DECEMBER 2023
|
Share
Capital
|
Share
Premium
|
Shares to be
Issued
|
Merger
Reserve
|
Foreign Currency
Reserve
|
Share Based Payment
Reserve
|
FVTOCI
Reserve
|
Retained
Earnings
|
Total
Equity
|
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
At 1 January 2022
|
16,889,598
|
41,693,178
|
-
|
6,683,000
|
(38,726)
|
305,095
|
(21,437)
|
(38,284,665)
|
27,226,043
|
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(2,859,392)
|
(2,859,392)
|
Other Comprehensive
Income
|
-
|
-
|
-
|
-
|
665,656
|
-
|
(19,598)
|
-
|
646,058
|
Total Comprehensive Income for the
year
|
-
|
-
|
-
|
-
|
665,656
|
-
|
(19,598)
|
(2,859,392)
|
(2,213,334)
|
Share based payment
charges
|
-
|
-
|
-
|
-
|
-
|
242,832
|
-
|
-
|
242,832
|
Lapse of options
|
-
|
-
|
-
|
-
|
-
|
(144,178)
|
-
|
144,178
|
-
|
At 31 December 2022
|
16,889,598
|
41,693,178
|
-
|
6,683,000
|
626,930
|
403,749
|
(41,035)
|
(40,999,879)
|
25,255,541
|
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,618,094)
|
(3,618,094)
|
Other Comprehensive Income
|
-
|
-
|
-
|
-
|
(237,364)
|
-
|
(5,289)
|
-
|
(242,653)
|
Total Comprehensive Income for the year
|
-
|
-
|
-
|
-
|
(237,364)
|
-
|
(5,289)
|
(3,618,094)
|
(3,860,747)
|
Issue of Share Capital (net of expenses)
|
1,391,901
|
4,905,159
|
-
|
-
|
-
|
-
|
-
|
-
|
6,297,060
|
Share based payment charges
|
-
|
-
|
43,423
|
-
|
-
|
208,930
|
-
|
-
|
252,353
|
Lapse of options
|
-
|
-
|
-
|
-
|
-
|
(11,970)
|
-
|
11,970
|
-
|
At
31 December 2023
|
18,281,499
|
46,598,337
|
43,423
|
6,683,000
|
389,566
|
600,709
|
(46,324)
|
(44,606,003)
|
27,944,207
|
|
|
|
|
|
|
|
|
|
|
The following describes the nature
and purpose of each reserve within owners' equity:
Reserve
|
Description and purpose
|
Share Capital
|
Amounts subscribed for share capital
at nominal value
|
Share Premium
|
Amounts subscribed for share capital
in excess of nominal value less costs of fundraising
|
Shares to be Issued
|
Shares for which consideration has
been received but which are not issued yet
|
Merger Reserve
|
Amounts subscribed for share capital
in excess of nominal value in respect of the consideration paid in
an acquisition arrangement, when the issuing company takes its
interest in another company from below 90% to 90% or above equity
holding
|
Foreign Currency Reserve
|
Gains/losses arising on
retranslating the net assets of group operations into Pound
Sterling
|
Share Based Payment
Reserve
|
Represents the accumulated balance
of share based payment charges recognised in respect of asset
acquired and share options granted by Savannah Resources Plc, less
transfers to retained losses in respect of options exercised,
lapsed and forfeited
|
FVTOCI Reserve
|
Cumulative changes in fair value of
equity investments classified at fair value through other
comprehensive income (FVTOCI)
|
Retained Earnings
|
Cumulative net gains and losses
recognised in the Consolidated Statement of Comprehensive Income
and other transactions recognised directly in Retained
Earnings
|
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31
DECEMBER 2023
|
Share
Capital
|
Share
Premium
|
Shares to be
Issued
|
Merger
Reserve
|
Share Based Payment
Reserve
|
FVTOCI
Reserve
|
Retained
Earnings
|
Total
Equity
|
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
At 1 January 2022
|
16,889,598
|
41,693,178
|
-
|
6,683,000
|
305,095
|
(21,437)
|
(28,707,640)
|
36,841,794
|
Profit for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
1,120,818
|
1,120,818
|
Other Comprehensive
Income
|
-
|
-
|
-
|
-
|
-
|
(19,598)
|
-
|
(19,598)
|
Total Comprehensive Income for the
year
|
-
|
-
|
-
|
-
|
-
|
(19,598)
|
1,120,818
|
1,101,220
|
Share based payment
charges
|
-
|
-
|
-
|
-
|
242,832
|
-
|
-
|
242,832
|
Lapse of options
|
-
|
-
|
-
|
-
|
(144,178)
|
-
|
144,178
|
-
|
At 31 December 2022
|
16,889,598
|
41,693,178
|
-
|
6,683,000
|
403,749
|
(41,035)
|
(27,442,644)
|
38,185,846
|
Profit for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
(2,109,648)
|
(2,109,648)
|
Other Comprehensive Income
|
-
|
-
|
-
|
-
|
-
|
(5,289)
|
-
|
(5,289)
|
Total Comprehensive Loss for the year
|
-
|
-
|
-
|
-
|
-
|
(5,289)
|
(2,109,648)
|
(2,114,937)
|
Issue of Share Capital (net of expenses)
|
1,391,901
|
4,905,159
|
-
|
-
|
-
|
-
|
-
|
6,297,060
|
Share based payment charges
|
-
|
-
|
43,423
|
-
|
208,930
|
-
|
-
|
252,353
|
Lapse of options
|
-
|
-
|
-
|
-
|
(11,970)
|
-
|
11,970
|
-
|
At
31 December 2023
|
18,281,499
|
46,598,337
|
43,423
|
6,683,000
|
600,709
|
(46,324)
|
(29,540,322)
|
42,620,322
|
The following describes the nature
and purpose of each reserve within owners' equity:
Reserve
|
Description and purpose
|
Share Capital
|
Amounts subscribed for share capital
at nominal value
|
Share Premium
|
Amounts subscribed for share capital
in excess of nominal value less costs of fundraising
|
Shares to be Issued
|
Shares for which consideration has
been received but which are not issued yet
|
Merger Reserve
|
Amounts subscribed for share capital
in excess of nominal value in respect of the consideration paid in
an acquisition arrangement, when the issuing company takes its
interest in another company from below 90% to 90% or above equity
holding
|
Share Based Payment
Reserve
|
Represents the accumulated balance
of share based payment charges recognised in respect of asset
acquired and share options granted by Savannah Resources Plc, less
transfers to retained losses in respect of options exercised,
lapsed and forfeited
|
FVTOCI Reserve
|
Cumulative changes in fair value of
equity investments classified at fair value through other
comprehensive income (FVTOCI)
|
Retained Earnings
|
Cumulative net gains and losses
recognised in the Consolidated Statement of Comprehensive Income
and other transactions recognised directly in Retained
Earnings
|
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31
DECEMBER 2023
|
|
|
2023
£
|
2022
£
|
Cash flows used in operating activities
|
|
|
|
|
Loss for the year
|
|
|
(3,618,094)
|
(2,859,392)
|
Depreciation and amortisation
charges
|
|
|
22,095
|
23,456
|
Share based payment charge - Share
Options
|
|
|
208,930
|
242,832
|
Shares based payment charge - Shares
to be issue in lieu of bonus
|
|
|
43,423
|
-
|
Finance Income
|
|
|
(108,286)
|
(34,695)
|
Finance Costs
|
|
|
555
|
265
|
Reverse impairment other
assets
|
|
|
(710,467)
|
-
|
Foreign Exchange
Losses/(Gains)
|
|
|
131,325
|
(858,679)
|
Cash flow used in operating activities before changes in
working capital
|
|
|
(4,030,519)
|
(3,486,213)
|
Decrease/(Increase) in Trade and
Other receivables
|
|
|
140,148
|
(78,217)
|
Increase/(Decrease) in Trade and
Other Payables
|
|
|
982,457
|
(538,972)
|
|
|
|
|
|
Net cash used in operating
activities
|
|
|
(2,907,914)
|
(4,103,402)
|
Cash flow used in investing activities
|
|
|
|
|
Purchase of Intangible Exploration
Assets
|
|
|
(1,456,075)
|
(1,771,821)
|
Purchase of Tangible Fixed
Assets
|
|
|
(120,573)
|
(852,127)
|
Interest received
|
|
|
96,367
|
28,438
|
Proceeds from relinquishment of the
rights and obligations of discontinued operations
|
|
|
-
|
89,981
|
Net cash used in investing
activities
|
|
|
(1,480,281)
|
(2,505,529)
|
|
|
|
|
|
Cash flow from financing activities
|
|
|
|
|
Proceeds from issues of ordinary
shares (net of expenses)
|
|
|
6,297,060
|
-
|
Principal paid on Lease
Liabilities
|
|
|
(9,252)
|
(5,022)
|
Interest paid on Lease
Liabilities
|
|
|
(555)
|
(265)
|
Net cash from/(used in) financing
activities
|
|
|
6,287,253
|
(5,287)
|
|
|
|
|
|
Increase/(Decrease) in Cash and Cash
Equivalents
|
|
|
1,899,058
|
(6,614,218)
|
|
|
|
|
|
Cash and Cash Equivalents at beginning of
year
|
|
|
7,202,334
|
13,002,084
|
Increase Restricted Cash
|
|
|
701,903
|
-
|
Exchange (Losses)/Gains on Cash and
Cash Equivalents
|
|
|
(82,014)
|
814,468
|
|
|
|
|
|
Cash and Cash Equivalents at end of year
|
|
|
9,721,281
|
7,202,334
|
|
|
|
| |
COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER
2023
|
|
|
2023
£
|
2022
£
|
Cash flows used in operating activities
|
|
|
|
|
(Loss)/Gain for the year
|
|
|
(2,109,648)
|
1,120,818
|
Impairment of Investment in
Subsidiaries
|
|
|
-
|
17,821
|
Impairment of Financial
Assets
|
|
|
(466,912)
|
102,988
|
Share based payment reserve
charge - Share Options
|
|
|
208,930
|
242,832
|
Shares based payment charge - Shares
to be issue in lieu of bonus
|
|
|
43,423
|
-
|
Dividends Income
|
|
|
-
|
(811,572)
|
Finance Income
|
|
|
(108,286)
|
(34,695)
|
Foreign Exchange
Losses/(Gains)
|
|
|
728,241
|
(2,274,357)
|
Cash flow used in operating activities before
changes
in
working capital
|
(1,704,252)
|
(1,636,165)
|
Decrease in Trade and Other
Receivables
|
|
|
39,911
|
168,209
|
Increase/(Decrease) in Trade and
Other Payables
|
|
|
29,126
|
(488,024)
|
|
|
|
|
|
Net cash used in operating
activities
|
|
|
(1,635,215)
|
(1,955,980)
|
Cash flow used in investing activities
|
|
|
|
|
Loans to subsidiaries
|
|
|
(3,260,033)
|
(5,204,762)
|
Proceeds from repayment of loans to
subsidiaries
|
|
|
553,702
|
799,772
|
Proceeds from dividends from
subsidiaries
|
|
|
-
|
811,572
|
Interest received
|
|
|
96,367
|
28,438
|
|
|
|
|
|
Net cash used in investing
activities
|
|
|
(2,609,964)
|
(3,564,980)
|
|
|
|
|
|
Cash flow from financing activities
|
|
|
|
|
Proceeds from issues of ordinary
shares (net of expenses)
|
|
|
6,297,060
|
-
|
|
|
|
|
|
Net cash from financing
activities
|
|
|
6,297,060
|
-
|
|
|
|
|
|
Increase/(Decrease) in Cash and Cash
Equivalents
|
|
|
2,051,881
|
(5,520,960)
|
|
|
|
|
|
Cash and Cash Equivalents at beginning of
year
|
|
|
6,241,356
|
11,085,944
|
Exchange (Losses)/Gains on Cash and
Cash Equivalents
|
|
|
(66,718)
|
676,372
|
Cash and Cash Equivalents at end of year
|
|
|
8,226,519
|
6,241,356
|
|
|
|
|
|
**ENDS**